To evaluate the orthographic and phonological processing skills of developmental dyslexics, we (a) examined their abilities to exploit properties of orthographic redundancy and (b) tested whether their phonological deficit extends to spelling-to-sound connections for large-grain size units such as syllables. To assess the processing skills in dyslexics, we utilized the illusory conjunction paradigm to investigate the nature of reading units in French dyslexic and control children matched in reading age. In control children, reading units were defined by both orthographic redundancy and phonological syllable information. In dyslexics, however, reading units were defined only by orthographic redundancy. Therefore, despite their impairment in reading acquisition, developmental dyslexics have the ability to encode and exploit letter frequency co-occurrences. In contrast, their access to phonological syllables from letters was impaired, suggesting that their phonological deficit extends to large grain-size phonological units.